Final WOTUS Rule a Blow to Housing Affordability
In a blow to housing affordability and regulatory certainty for builders and other stakeholders, today the Biden administration established final regulations that will dramatically expand the definition of “waters of the United States” (WOTUS) under the Clean Water Act (CWA), even as the U.S. Supreme Court has yet to decide on the legality of key aspects of the rule.
“Rather than providing clarity and certainty for home builders and other affected stakeholders, this definition of WOTUS adds uncertainty and confusion to the regulatory process, raises housing costs and drastically increases federal overreach in the process,” said NAHB Chairman Jerry Konter.
Regrettably, the final rule continues to rely upon a confusing and legally flawed theory of CWA federal jurisdiction known as the “significant nexus test” to potentially assert federal control over most isolated wetlands and ephemeral streams impacting numerous activities, including home building.
In practice, the significant nexus test has proven extremely difficult to apply consistently in the field, leaving developers and builders unable to discern for themselves which isolated wetlands, ephemeral streams, or even human-made drainage features, like roadside ditches, are federally jurisdictional under the CWA.
NAHB believes the decision by the U.S. Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps) to finalize today’s WOTUS definition is counterproductive and shortsighted, especially since the Supreme Court’s upcoming ruling under Sackett v. EPA is squarely focused on the legality of the significant nexus test, which is a critical part of the final rule.
The new WOTUS rule radically extends the areas in which home builders are required to get federal permits will result in continued regulatory barriers to affordable housing as single-family and multifamily developers struggle to find the developable land necessary to produce the new affordable housing units this nation desperately needs. In short, the rule will generate bureaucratic and project delays, and raise housing costs at a time when the nation is already experiencing a housing affordability crisis.
Moreover, the final rule’s continued reliance upon the significant nexus test when determining CWA jurisdiction over otherwise isolated and ephemeral features prevents states and local governments from acting as co-regulators, as intended by Congress when the CWA was drafted more than 40 years ago. And not only does the significant nexus test go well beyond the limits of federal jurisdiction set forth previously by the Supreme Court, it also results in duplicative and even conflicting wetlands requirements at the federal, state and local levels of government.
“The Biden administration has declared a housing affordability crisis, but if the administration is truly interested in knocking down barriers to affordable housing, it will direct the EPA and Corps to keep from implementing this rule until the Supreme Court issues its ruling in the Sackett case,” said Konter.
Latest from NAHBNow
Dec 11, 2025
House Passes NAHB-Supported PERMIT ActThe House today passed the PERMIT Act, a legislative package championed by NAHB designed to provide the necessary clarity and confidence needed under the Clean Water Act (CWA) permitting process.
Dec 11, 2025
Alabama Home Builders Foundation Prepares Today’s Students for Tomorrow’s CareersFor three decades, the Alabama Home Builders Foundation (AHBF) has guided high school students and adults statewide toward careers in residential construction.
Latest Economic News
Dec 09, 2025
Mortgage Activity Continued to Climb in NovemberMortgage activity continued to climb in November, posting the largest year-over-year increase in more than five years. Every major category increased on a year-over-year basis as mortgage rates continue to trend lower, led by strong increases in refinancing and adjustable-rate mortgage activity.
Dec 08, 2025
Community Associations: A Growing Trend in 2024In 2024, 65.7% of all new single-family homes started were built within a community or homeowner’s association. This share increased from the 64.8% recorded in 2023, according to data tabulated from the Census Bureau’s Survey of Construction (SOC).
Dec 05, 2025
Mortgage Rates Continue to Trend Lower in NovemberThe average mortgage rate in November continued to trend lower to its lowest level in over a year. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.24% in November, 2 basis points (bps) lower than in October. Meanwhile, the 15-year rate increased 3 bps to 5.51%.